Country's largest software exporter TCS today reported a marginal dip in net profit at Rs 5,328 crore in December quarter due to lower margins, a tepid performance compared to rival Infosys that beat market expectations to log 13 per cent jump in profits.
The Tata group firm had posted a post-tax profit of Rs 5,333 crore under the IGAAP system of accounting in the December quarter last year, while its profit in the preceding September quarter stood at Rs 5,244 crore.
TCS' operating margin dipped by 2.88 per cent as compared to last year, to 26.9 per cent, but was up 0.21 per cent over the preceding September quarter.
However, TCS CEO and Managing Director N Chandrasekaran said this a good performance in a seasonally weak quarter which witnesses holidays and forloughs. He pointed to a 2.9 per cent growth in revenues over the preceding quarter at Rs 24,501 crore. On a year-on-year basis, TCS revenue in December quarter 2014 rose by 15 per cent.
He said a bulk of the push has come from increase in pricing and some help has come from a jump in volumes and currency, while offshore movement has affected it marginally.
However, on the yearly growth perspective, Chandrasekaran, who had earlier opined that FY15 will be better than FY14 for the company, hinted at the picture being not so good with only a few months left in this fiscal.
He said TCS has achieved a growth of only about 4.74 per cent and it would have been better had it been higher by 40 basis points, which would have given it the confidence of bettering FY14 performance.
"When you miss that, you can never (catch up). I cannot say that we will catch in Q4," Chandrasekaran said, adding, "You make a comment like that once and you learn from it."
He, however, maintained that the company continues to be optimistic about the future and sees a better deal pipeline, no client-specific problems and there are positives on 2015 budgets from the clients as well.
The only challenging areas pointed out by the company were in the energy space, where the recent fall in oil prices has made it difficult for client companies, he said, adding that United Kingdom as a geography is also facing pressures where it has acquired Diligenta business.
Dipen Shah, Head- Private Client Group Research, Kotak Securities, said: "The results have not provided any positive surprise. The in-line results for 3Q reflect the impact of seasonality as well as softness in a few verticals like Insurance and Energy / Utilities.
